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Digital Announces Stronger Alliance With Microsoft

November 20, 1991

BOSTON (AP) _ The computer industry has resembled a giant dating game lately, with big players trying to find partners to satisfy demanding customers.

The latest evidence of this trend came Tuesday, when Digital Equipment Corp. said it would link its network technology to popular software from Microsoft Corp.

The move will combine Digital’s expertise in tying computers together around the world with Microsoft’s Windows, a hot-selling product that allows personal computer users to manipulate symbols and graphic images on their screens.

In addition, Digital said it would strengthen the alliance by reproducing and selling Microsoft’s business spreadsheet and word processor programs that operate on Windows. Digital also will provide full service on a wide range of Microsoft products.

″No one company can provide all the technology that customers will use,″ said John Rose, a vice president of Maynard-based Digital. ″Far more choices are available now than there ever were in any previous system of computing in the past.″

Analysts say the partnership reflects a continued shuffling of relationships among computer companies, as industry watchers need a scorecard to keep track of who is teaming with whom.

This holds true in the case of Digital and Microsoft, which have both built ties to other companies in the past.

″They have one or two dances and then go onto someone else,″ said David Evancha, an analyst with WorkGroup Technologies in Hampton, N.H.

This year, International Business Machines Corp. announced an alliance with Apple Computer Inc., which also has maintained strategic ties with Digital.

IBM and Microsoft, which were once strong allies, have been at odds over the development of operating systems for personal computers.

IBM, however, formed another alliance this year with software maker Lotus Development Corp., a rival of Microsoft.

Meanwhile, Lotus showed support Tuesday for the Digital-Microsoft collaboration by saying it would adapt its software programs to this new system.

″Virtually every vendor you read about everyday is tying in with someone,″ said George Elling, an analyst with Merrill Lynch Research in New York.

Martin Taucher, spokesman for Microsoft, based in Redmond, Wash., called the latest agreement ″an exciting prospect for us.″

″We are very much a company that works with all the major players and will continue to do so,″ he said.

Analysts say a driving force behind these alliances is the move toward ″open″ systems, where customers demand a wide range of products that can work together even if they come from different companies.

Major companies such as Digital and IBM ″realize they can no longer go it alone,″ Elling said.

Furthermore, as the differences between hardware become fuzzier and computers become a commodity, companies are forced to distinguish themselves on how they tailor software programs to run the machines, analysts said.

Digital and Microsoft have collaborated previously in the selling of some networking technology.

But Digital said the new products would allow Microsoft Windows users to work together more efficiently whether they are separate by a few desks or by thousands of miles.

Customers are expected to include banks, which employ groups of people processing millions of documents daily, as well as laboratory researchers stationed at different sites.

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